Historic Elks Theatre in Middletown put up for sale; Friends group wanted to buy it for $1

Two years ago, then-newly appointed Middletown Borough Council member Ian Reddinger caused an uproar by saying the historic Elks Theatre had no future as a movie house, but was better suited to becoming luxury condominiums, retail storefronts, or a combination of the two.

Now, Reddinger will have the opportunity to see if that vision has a chance of becoming reality.

The 107-year-old theater, closed since April 2015, will be listed for sale, it was decided May 16 by the Middletown Industrial and Commercial Development Authority, which owns the theater. Reddinger chairs the authority.

It was not revealed how soon the theater will be listed for sale, at what price, or for how long.

The Elks Theatre is part of the Elks Building at South Union and West Emaus streets in downtown Middletown. The rest of the Elks Building — all but the theater — is owned and occupied by Tattered Flag Brewery & Still Works.

No one on the three-member authority, which also includes Mayor James H. Curry III and Councilor Dawn Knull, had any comment regarding the Elks Theatre action when asked by the Press & Journal.

Curry’s motion said the theater will be listed using a Realtor who is already working for the authority. The authority’s fall 2017 sale of the McNair House property was handled by Shawn McGeehan, a commercial specialist with the Joy Daniels Real Estate Group. McGeehan did not immediately respond to a request for comment from the Press & Journal.

Friends group disappointed

Friends of the Elks Theatre, the Middletown-based nonprofit group whom the authority had offered to transfer the theater to for $1, reacted with disappointment over the authority’s decision to list the theater for sale.

“It is very sad that after more than 100 years of operation as a movie theater, the borough has decided to bring to an end the historic Elks Theatre,” Gordon Einhorn, a member of the Friends’ board of directors, said in an emailed statement to the Press & Journal.

“It is very difficult to understand why this decision was made. The Friends of the Elks Theatre, which successfully operated the theater before the property was bought by the borough, was fully prepared to once again operate the theater and raise the money needed to turn it into the multi-function facility that would not only show movies but would also be capable of hosting live events.”

“It is particularly surprising given the fact that there was strong community support for reopening the theater, as evidenced by the petition presented to the borough over a year ago in which more than 1,000 people expressed their support. The Friends provided all the information that the ICDA requested but has received no explanation as to why this decision was made. Despite the decision to list the building for sale, it is not too late to save the theater for another 100 years of operation. We hope that ICDA will reconsider its decision.”

An appraiser hired by the authority appraised the theater in 2017, according to Reddinger. However, the borough has declined Right-to-Know requests from the Press & Journal to release the appraisal.

Friends emerged from the now-defunct Greater Middletown Economic Development Corp. GMEDC owned the Elks Building from 2005 to 2014 and ran the theater for many of those years. GMEDC kept operating the theater after GMEDC sold the Elks Building to the authority in September 2014, under a month to month lease until the authority closed the theater for renovations in April 2015.

In August 2015, the Friends group submitted a proposal to the authority to transform the theater into a performing arts center.

In March 2017, the Friends group submitted a letter of intent to the authority, confirming its accepting an authority offer to transfer the theater to the Friends group for $1.

Reddinger had proposed selling the theater to the Friends group for $1 in June 2016, when he made his comments regarding the theater being better suited to becoming condos or a storefront.

“I would not put a dime into it,” Reddinger said at the time of preserving the theater as a movie house. “It’s a horrible investment. You will never get your money back on a one-screen theater, period.”

Despite not wanting to put any of his own money, or tax dollars, into the theater, Reddinger has persisted in his belief that the market holds the key to the borough finding a way out of its theater ownership burden. As recently as January, Reddinger told the Press & Journal he wanted to know what the market would be willing to pay for the theater.

What could move in?

What could the theater be, other than a theater?

Located in the first block of West Emaus Street in the former Elks Building, the theater is in an area of downtown Middletown zoned for general commercial purposes.

General commercial, or C2, has a long list of permitted uses by right; including but not limited to banks, businesses and other types of offices; barbershops and beauty parlors, a bed and breakfast, churches, clubs and lodges, day care facilities, an art studio, retail stores, hotels, restaurants … you can even put a mortuary in there, or a marijuana dispensary.

Or parking.

Uses by special exception include a communication antenna or tower, a residential hotel or motel, or something called “a commercial tourist home.”

But the only use anyone has expressed in the Elks Theatre in recent years has been in transforming the theater into a performing arts center.

The Friends group has not been the only entity to propose that, or even the first.

In September 2014, shortly after the authority acquired the Elks Building from GMEDC, the authority received an offer from Phantom Theater Company.

The company wanted to lease the Elks Building from the authority, in order to transform the entire building including the theater into a performing arts center.

Instead, the authority in 2015 initially chose to lease all of the Elks Building except the theater to Tattered Flag Brewery & Still Works.

The authority as part of the deal loaned Tattered Flag $1.5 million. Of that, $1.1 million was to help Tattered Flag convert all the Elks Building except the theater into the still works and distillery.

The remaining $400,000 was for Tattered Flag to purchase all of the Elks Building except the theater from the authority. Tattered Flag is paying back the loan to the authority over 25 years at 4 percent interest.

In March 2016, Phantom again contacted the authority, saying it was willing to convert just the theater into a performing arts center.

But Phantom pulled its plan a few months later, citing “misinformation” being spread about Phantom through social media in Middletown, and what Phantom referred to as political turmoil and discord between borough council and the authority. Phantom has not been heard from since regarding the Elks Theatre.

Nor is Reddinger alone in opposing the borough spending any tax dollars on the theater.

In late 2016, borough council twice voted to reject a $500,000 state grant to renovate the theater that the borough had been awarded by Gov. Tom Wolf.

Both times, the rejection came down to concerns expressed by a majority of councilors and Curry that the borough would need some amount of tax dollars to come up with the $500,000 local required match for the state grant.

Einhorn told the Press & Journal that Friends has not heard from the authority since the end of March 2018, after Friends had sent the authority all the information the authority requested regarding the group’s operation of the theater and its fundraising plan to convert the theater into a performing arts center.

No Friends bid

Einhorn said that the Friends group has no plans to put in a bid to purchase the theater through the market listing.

“We are a nonprofit group with limited funds. They had made an offer in good faith to sell it to us for $1. That was their idea,” Einhorn said. “If we assume ownership we will need every penny for the renovation. It is not going to be cheap. I would rather see it go to the renovation than to pay more to the ICDA when they made that $1 offer.”

In 2016 a construction company working for Tattered Flag estimated at $1.1 million the cost to renovate the theater and reopen it as a performing arts center.

The company did not identify any structural problems with the theater, Einhorn noted. The theater in recent years has had its roof replaced and a new heating system installed. The borough since acquiring the theater has put in a new fire alarm system and a new ceiling, and redid all the wiring.

The theater still needs “substantial work, but not from a structural or engineering perspective,” Einhorn said.

Einhorn also referred to a news media account about new life for the West Shore Theatre in New Cumberland that was posted on May 17, one day after the authority decided to list the Elks Theatre for sale. The West Shore Theatre had been closed since December, 2017.

According to the PennLive article, a man and his son bought the 78-year-old theater at auction for $122,000. The new owners are working with New Cumberland Mayor Doug Morrow and Friends of the West Shore Theatre, although the article said the borough is not providing any financial backing to the endeavor.

The new owners are said to be negotiating to lease the theater to the nonprofit group so the group can run the theater day to day.

Morrow helped organize the West Shore Theatre Friends’ group and will serve on the group’s board of directors, the article said. A public meeting to gather input from the community is to be held at the New Cumberland Fire Department on May 24, according to the article.

Einhorn sees a difference of “night and day” between the support the West Shore Friends group is getting from New Cumberland borough, and the support the Elks Theatre Friends group is getting from Middletown borough.